INTRODUCTION
In arbitration, selecting the right arbitrator can be the difference between a swift, fair outcome and a prolonged, contentious process. Arbitration is often chosen for its efficiency, confidentiality, and finality, but the effectiveness of this process hinges significantly on the arbitrator’s qualifications and approach. Arbitration is a process in which a neutral third party, tribunal or panel considers evidence presented by the parties and makes a decision that will be binding, according to the prior consent of the parties. A distinguished French writer described arbitration as an “apparently rudimentary method of settling disputes since it consists of submitting to ordinary individuals whose only qualification is being chosen by the parties”..
However, infrequently, an issue may sometimes arise that may require the services of an outside expert agency, such as a consultant. An expert specialist in a particular field who provides informed opinions or advice based on their knowledge and expertise. They are often called upon to analyse specific aspects of a case, offering technical insight or clarifying complex issues. This article delves into the key considerations that should guide parties when making critical decisions.
PARTIES PREFERENCE IN AN ARBITRATION AGREEMENT
Generally, parties are free to agree on the size, composition and method of appointment of the arbitral tribunal. The Arbitration and Mediation Act (AMA) 2023[1] establishes that three arbitrators shall be appointed, each party shall appoint one arbitrator, and the two arbitrators shall appoint the third arbitrator. Where parties fail to appoint within 30 days, the appointing authority designated by the parties or the court shall appoint Section 7 (a)(b). The appointing authority is often predetermined in an arbitration clause of a contract, parties involved agree in advance on an institution or individual or the court to act. Institutions(The Nigerian Institute of Chartered Arbitrators (NICArb) serves as an appointing authority for parties, following its rules and procedures for appointing arbitrators. Article 7 of NICArb[2] rules state “Unless the parties have agreed otherwise or unless it appears to the President, through the Registrar, giving due regard to any proposals by the parties, the complexity, the quantum involved or other relevant circumstances of the dispute, that the dispute warrants the appointment of three arbitrators, a sole arbitrator shall be appointed”.
On ad hoc arbitration basis, the choice of arbitrator is usually negotiated by the parties, which plays a crucial role in shaping the outcome of the whole proceeding. Parties may prefer an arbitrator with specific expertise relevant to their dispute e.g. (a construction-related dispute) or a generalist with strong legal experience. An expert arbitrator who gives an unbiased opinion, it is generally true that professional qualifications and expertise are likely to be of significant importance in special disputes.
QUALITIES OF AN EXPERT AND A GENERALIST
The choice between an expert and a generalist arbitrator depends on the nature of the dispute, the parties’ priorities, and the case’s specific requirements. An expert arbitrator is beneficial in cases where technical understanding is crucial, and decisions need to be informed by industry norms. Conversely, a generalist arbitrator is preferred when the dispute requires a strong legal perspective, procedural fairness, and impartiality.
In international arbitration, expert arbitrators are typically selected and appointed by the parties. Each party covers the costs of the expert arbitrator they appoint. In rare instances, parties may jointly agree to appoint a single expert arbitrator. However, this is uncommon, as parties with conflicting interests are unlikely to concur on a single arbitrator’s expertise or viewpoint. Additionally, relying on a single expert arbitrator leaves little room for either party to challenge an unfavourable decision
- EXPERT ARBITRATOR
An expert arbitrator can quickly grasp the technical details of a dispute, reducing the need for extensive expert testimony or explanations. Their familiarity with industry standards, norms, and best practices helps in evaluating the actions of claims made by parties to align with the benchmarks leading to a more efficient arbitration process. They possess deep knowledge in special fields allowing them to make decisions based on a nuanced understanding of the industry’s norms and complexities. Parties may have more confidence in the decision of an arbitrator who is familiar with the technical aspects of their industry, believing that their concerns and arguments are fully understood. Article 5 of the International Bar Association[3] (IBA) Rules provide for party-appointed experts as a means of evidence on specific issues, while Article 6 covers the tribunal-appointed experts. These rules acknowledge the necessity of expert evidence in arbitration proceedings, especially when technical knowledge is required. UNCITRAL Model Law on International Commercial Arbitration Article 19(2)[4] allows parties to agree on the procedure to be followed by the arbitral tribunal. In the absence of such an agreement, the tribunal can conduct the arbitration in a manner it considers appropriate, which can include appointing experts to assist in understanding technical matters. Article 26[5] Specifically addresses the appointment of experts by the arbitral tribunal, giving the tribunal the authority to appoint one or more experts to report on specific issues. This underscores the importance of expert knowledge in complex disputes.
The absence of expert or generalist arbitrators can lead to several problems such as:
- Lack of specialized knowledge
- Biased and uninformed outcome
- Increased miscommunication
- Reduced credibility
- Inadequate resolution
- Longer proceeding
- Higher cost
- GENERALIST
A generalist brings a wide-ranging legal perspective, focusing on legal principles and procedural fairness rather than getting bogged down in technical details. This can be beneficial in disputes where legal interpretation is key. Generalists may be perceived as more impartial, especially in disputes where technical experts might be seen as having biases or preconceived notions due to their industry involvement. They are often well-suited to handle complex disputes involving multiple issues across different fields, balancing legal and procedural aspects effectively.
- Overemphasis on Technical Details
- Risk of Bias
- Miscommunication and Misunderstanding
- Imbalanced Decision-Making
- Over complication of the Process
- Difficulty in Bridging Diverse Issues
- Inadequate Legal and Procedural Oversight
“As international disputes become increasingly large and complex, experts will be called upon more frequently to offer their invaluable expertise across a broader range of capacities. All parties involved, including both generalist and expert arbitrators, must work to ensure that their knowledge is fully utilized and continuously developed to avoid being side lined.”
CONCLUSION
The appointment of arbitrators is a critical step in the arbitration process, as it directly impacts the fairness, efficiency, and outcome of the dispute resolution. The careful selection of arbitrators whether chosen by the parties or appointed by a tribunal ensures that the dispute is handled by individuals with the necessary expertise, impartiality, and judgment. A well-chosen arbitrator, with a balanced combination of specialized knowledge and a generalist perspective, can navigate the complexities of the case, leading to a resolution that is both equitable and binding. Therefore, the appointment process is not just a procedural formality, but a foundational element that determines the overall success and legitimacy of the arbitration.
[1] Section 7(a)(b) AMA 2023
[2] Article 7 of NICArb arbitration rules 2021 https://www.nicarb.org/assets/doc
[3] Article 5 of the International bar Association Rules (IBA)
[4] Article 9(2) of the International Bar Association Rules (IBA)
[5] Article 26 of the International Bar Association Rules (IBA)
